DOWNSIZING? THINK AGAIN.

Experts have warned that families may find it difficult to afford downsizing if the discount on stamp duty is not extended.

Experts in the industry have warned that this move will only lead to a housing shortage as homeowners of larger homes won't be motivated to move.

It's feared Rachel Reeves will scrap the stamp duty reduction in the budget that is due to be released on Wednesday.

The Conservatives temporarily raised the threshold for nil rate from £125,000 up to £250,000, and from £300,000 to £450,000 for first time buyers.

The current extension is set to expire on March 31st. Rachel Reeves, the Chancellor of Australia will decide whether or not it should be extended beyond April.

Kirsty Allsopp, a property expert, criticised last week the changes expected in the budget. She said it would cause 'chaos in the housing market'.

Capital Economics' Paul Dales warned that this change could lead to a temporary increase in house prices as sellers rush to avoid paying a higher tax bill come April.

Private Finance mortgage broker Chris Sykes said that many clients with larger homes may be put off from selling their houses by the new policy.

Toby Leek is the president of Propertymark, a trade association for estate agents. He said that some elderly homeowners are being discouraged from downsizing because they cannot find anything in between a large home and a small apartment.

According to Barclays research, 85 percent of UK owner-occupied houses have at least one extra bedroom. This makes them 'underoccupied'.

The bank called on the government to provide grants to households or to allow them to deduct moving costs from stamp duty in order to encourage people downsize.

The Treasury raised £19m last year from the Land Tax, compared to £18m in the previous year.

A spokesperson for the government said: "We don't comment on speculation surrounding tax changes outside fiscal events."